Zenith Bank’s half-year audited results for the financial year ended June 30, 2021, which has been described as very impressive, has again vindicated shareholders and financial analysts who described the bank’s model as a good template for profitable businesses in a recovering economy like ours,

Last week’s release of the audited results for the half-year (HI) ended 30 June 2021, of Zenith Bank Plc, has continued to dominate discussions in the nation’s capital market as shareholders count their blessings over the impressive results churned out by the bank despite the current recovery mood of Nigeria’s economy.

The record showed that the bank recorded positive growth across key financial metrics in defiance of the crippling effects of the Covid-19 Pandemic on the overall economy.

Although the nation’s economy just recovered from a recession, yet the Group result showed growth in profit before tax of three per cent, from the N114 billion reported in H1 2020, to N117 billion in H1 2021. The Group also recorded a nine per cent growth in non-interest income from N116 billion in June 2020 to N127 billion in June 2021.

Shareholders’ Endorsement

Speaking on behalf of numerous shareholders of the bank, the National Coordinator Emeritus, Independent Shareholders Association of Nigeria (ISAN), Mr. Sunny Nwosu told THISDAY in an interview that Zenith Bank shareholders are impressed with the result which, he said, has brought smiles to the faces of the investors of the bank.

Nwosu, who disclosed that the shareholders’ expectations were met, said “Zenith Bank is always a delightful investment to shareholders.”

The bank, according to him, is always making a significant difference in quarterly returns. “The bank’s reports and returns always excite shareholders,” he stated.

On shareholders’ expectations at the end of the full year, Nwosu said “Though the shareholders won’t give the bank any target if they can hit the N200billion mark as profit after tax at the end of the year, the board, management and the shareholders of the bank will be happy for the feat.”

Another shareholder of the bank, Mr. Olubunmi Adeagbo, explained that the shareholders are also glad about the resolve of Zenith Bank to fully maximise the opportunities that the recovering fundamentals present while leveraging technology to expand its retail footprints to deliver improved returns to all its stakeholders.

This resolve, according to him, shows that the board and management of the bank are reliable and that they would not use the current economic challenges in the country as an excuse for unimpressive performance at the end of the year.

Financial analysts however explained that beyond the commendation of the bank’s shareholders, Zenith Bank’s ability to tap from the emerging opportunities in the nation’s efforts to recover from the doldrums brought about by the Covid-19 pandemic is a testimony to the resourcefulness and far-sightedness of the management of the bank.

On the domestic economy, Nigeria’s Gross Domestic Product (GDP) grew by 5.01 per cent in the second quarter of 2021, and the inflation rate, which peaked in March 2021 at 18.17 per cent is gradually trending down and currently at 17.38 per cent as of July 2021.

Drive for Retail Business

As a mark of its innovation, Zenith Bank was able to restrategise by ramping up its retail business in its bid to take a big chunk of the retail market, an exercise that eventually paid off within the period under review.

Consequently, the Group’s retail journey continued to deliver positive results as retail deposits grew by N38.2 billion from N1.72 trillion to N1.76 trillion year-to-date (YTD).

Another feature of the impressive result was the significant reduction in interest expense by 26 per cent and growth in non-interest income by nine per cent culminated in improved profitability.

Also, the financial institution’s savings balances grew marginally by two per cent YTD to close at N1.18 trillion, from N1.16 trillion as of December 2020.

The drive for increased retail deposits and a low-interest yield environment helped reduce the cost of funding from 2.2 per cent to 1.3 per cent in the current period. Furthermore, the results showed that operating expenses grew by 10 per cent year-on-year, but growth remained below the inflation rate, while the Group improved its Earnings per Share (EPS), which grew two per cent from N3.30 to N3.38 for the half-year ended June 2021.

The Group also increased total customer deposits by eight per cent to close the period at N5.77 trillion, demonstrating growth in its market share, just as total assets grew marginally to N8.52 trillion as of June 30, 2021, from the N8.48 trillion recorded as of December 31, 2020.

Despite the COVID-19 pandemic-induced challenges and the challenging operating environment, the Group grew its risk assets as gross loans were up to three per cent year-to-date, from N2.92 trillion to N2.99 trillion.

This was conservatively achieved at a low non-performing loans (NPLs) ratio of 4.51 per cent (FYE 2020: 4.29%) and a reduced cost of risk of 1.3 per cent (June 2020: 1.8%).

Leveraging on Innate Opportunities

Consequently, it was all praise galore for the management team led by the Group Managing Director, Mr. Ebenezer Onyeagwu for leading the bank in the period of the storm.

Giving a clue into the secret of the bank, its chairman, Mr. Jim Ovia had told the shareholders at its 2020 annual general meeting that it is the tradition of Zenith bank, as a resilient brand to leverage the innate opportunities within the environment and record a performance that further attests to the Group’s sound financial health.

Culture of Resilience

There is no doubt that Zenith Bank’s half-year 2021 result is a continuation of a culture of improvement performance exhibited in the bank’s 2020 financial year. For instance, the Group’s gross earnings grew by five per cent from N662.25billion in 2019 to N696.45billion in 2020.

Within the same period, Profit-before tax (PBT) rose by five per cent, from N243.29billion in 2019 to N255.86billion in 2020, while Profit-After-Tax (PAT) rose by 10 per cent, from N208.84billion in 2019 to N230.57billion in 2020.

Total deposits were N5.34trillion for the year ended December 31, 2020, representing a 25 per cent increase over the previous year’s figure of N4.26trillion. During the same period, total assets of the Group grew by 34 per cent from N6.35trillion to N8.48trillion, while shareholders’ funds rose by 19 per cent, from N941.89billion to N1.12trillion.

Zenith Bank Group is the largest bank in Nigeria by total assets size and Tier 1 Capital and is the tenth largest bank in Africa as measured by Tier 1 Capital (The Banker, July 2020). Zenith Bank is an international bank with operations in the United Kingdom, United Africa Emirates, and three other West African countries apart from Nigeria, namely, Ghana, Sierra Leone, and The Gambia.

In Nigeria, Zenith Bank has a strong franchise and reputation as one of the leaders in key financial variables such as customer deposits, total assets, earnings, and profitability. Within 30 years of its existence, Zenith Bank has demonstrated its resilience irrespective of the business/economic cycle and witnessed growth in virtually all areas.

Its growth is driven principally by strategic business focus and a conservative business model. The group has a stable and experienced management team that is well-positioned for strong execution leading to significant market share opportunities.

And according to the bank’s chairman, Jim Ovia, the combined intellectual capital and dedication of the staff, Management and Board have shaped Zenith Bank into the world-class institution that it is today.

Speaking at the bank’s last annual general meeting, Ovia explained that over the years, the Zenith Bank brand has become synonymous with leadership in the use of Information and Communication Technology (ICT) in banking and general innovation in the Nigerian banking industry.

The Bank has efficiently deployed its competitive edge of excellent customer services, size, brand name, branch network, and customer reach, stable management as well as motivated workforce, strong capital, and liquidity base to effectively compete in the Nigerian banking landscape.

Giving Back to Society

The bank has also continued to give back to the society through its sustainability and Corporate Social Responsibility (CSR) initiatives which Ovia said are hinged on the belief that today’s business performance is not all about the financial numbers,

“We believe that an institution’s social investments, contributions to inclusive economic growth and development as well as improvements in the condition of the physical environment, all constitute a balanced scorecard.

“Our social investments are targeted at health, education, women and youth empowerment, sports development, and public infrastructure enhancement.

To demonstrate our commitment to creating and expanding opportunities, the Bank regularly makes donations towards the setting up of ultramodern ICT centres in several educational institutions across the country. It also supports various developmental projects and healthcare delivery causes in Nigeria.”

The Bank equally contributes to the development of sports in Nigeria through its sponsorship of the Nigeria Football Federation (NFF), the Zenith Women Basketball League, and the Zenith Bank Delta Principals’ Cup, to name a few.

In response to the Covid-19 pandemic, the Bank donated N1 billion as part of the Coalition Against COVID-19 (CACOVID), a private sector-led initiative to support the Nigerian Government to combat the Covid-19 crisis. Apart from our healthcare sector interventions, we expanded our support for women-owned businesses in the year under review.

As a testament to our achievements in these areas, Zenith Bank won the awards for “Best Company in Promotion of Good Health and Wellbeing” and “Best Company in Promotion of Gender Equality and Women Empowerment” in Africa at the 2020 Sustainability, Enterprise and Responsibility Awards (SERAs)

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